4 Project characteristicsAll projects have many things in common:They involve high uncertainty.They involve three different and perceptually opposing commitments: Due date, budget, and contentThey require different levels of a variety of expertise and resources at different times and for different amounts of timeThey are impacted by variability within and between eventsDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

5 Establishing some current realityDo we go back to resources and pressure them to reduce their time and/or cost estimates?Do we hold resources to the scheduled start and finish dates for activities?Do we sometimes miss entire activities or at least dependencies in the planning stages of the project?Do our projects quickly evolve to having multiple critical paths?Do our projects seem to always be behind?Dr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

6 Are these are fairly typical?Existing project work is not complete before new projects require a shifting in priorities.The organization is too slow responding to important opportunities.Management feels constant pressure to increase resources to handle peak project loads.Promised lead times are longer than desired.There are difficulties completing projects on time.There is too much rework activity.

7 Are these are fairly typical?There are difficulties completing projects within budget.Project scope/content is too often compromised to meet dates and/or budget.Some projects are abandoned or completed without the organization gaining the promised benefit.Project Managers and resource managers have frequent conflicts about priorities and resource commitments.Problems in one part of a project cascade into other parts of the project and/or into other projects.

8 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COIf …Our reputation is important to us, andOur past experience has been a mixed bag that has often left our customers less than elated with our performance and shaken their confidence in us, andWe need to be able to communicate status to a variety of people and be able to quickly and accurately predict the impact of change and resource availability and assignment issues, andConditions and expectations today are fundamentally different than they were when the current formal project management approach was developed,Resources are scarce and heavily sharedWe are moving from competitive bid to design-build and negotiated contractsIt is becoming more and more critical that we collaborate rather than combatDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

9 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COThen…Do we need to approach project management differently in terms of a formal planning, execution and monitoring/reporting process?Is there an alternative to the primary formal project management style or methodology we use today?If so, do we have the knowledge and experience we would need relative to these alternatives to be able to determine which one would be best for our needs and situation?Dr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

10 A formal project management tool shouldHelp us with:Planning the projectExecuting the planManaging the processSet us up for success in both the current projects and future projectsFacilitate collaborative efforts and picking the best partnersDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

11 Even more fundamentally, the system we put in place should …Improve flow (order to cash in hand cycle time) as the primary objectiveBe translatable into practical mechanisms that guides the operation when not to produceEnable the need to abolish local efficienciesInclude a focusing process to balance flowDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

13 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COTraditionalPERT/CPMDeveloped in parallel in the 1950’sNeeded a way to organize highly complex project (Polaris Missile)Money and resources were not a problemMany modifications over the years to try to accommodate the fact that money and resources are now a big issueConstantly increasing sophistication of software and hardware has perpetuated the idea that problems with the process can be solved if we can just get enough data and process it fast enoughTremendous inertia (50 years of common practice) and investment causes considerable resistance to different approachesDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

15 How a project looks graphicallyNetwork (PERT View)Bar Chart (Gantt View)What do all of these things represent?

16 Traditional (PERT/CPM)Mechanisms for building the scheduleAssumption of infinite resource availability before identifying the Critical PathInitial Critical Path equals longestsequence of task and path dependenciesexclusive of resource dependenciesProjected Lead Time

17 Traditional (PERT/CPM)Resolving contentions (the real CP)Assumption of infinite resource availability before identifying the critical pathResolving resource contentions from start of project to completion giving priority to Critical Path tasksIncrease in Projected Lead Timewith resource contentions resolvedProjected Lead Time

18 Assumptions that variation in task times follow a normal distribution20%20%20%20%20%10%Total series variation = square root of the sum of the variances squared+/-2+/-2+/-5+/-2+/-2+/-21050Reality: the potential impact of bad things is much greater than the potential impact of good10% 50% 90% %

19 What happens in each situation if a task is finished late? or early ?20%20%20%20%20%10%+/-5+/-2+/-2+/-2+/-2+/-2101010101050What happens in each situation if a task is finished late? or early ?10

20 Assumptions that variations of actual task times will cancel each other out20%20%20%20%20%10%-2/+?-2/+?-2/+?-2/+?-2/+?-5/+?101010101050??52Late1010121010Early/late4861012101052610121010No report

21 Assumptions that variations of actual task times will cancel each other outTotal path/integration variation = Probability of event 1 * Probability of event 2 * Probability of event 3 * Probability of event 410Probability of orange integration task starting on time if all four feeding task time estimates are 90% is 66% (.9*.9*.9*.9)10101010

22 No consistent method for determining when tasks with float should startDo we start these * tasks as soon as possible (ASAP), as late as possible (ALAP), or somewhere in between?*****FloatCritical Path

23 Today with schedule updated for futureNo mechanism for decoupling the overall project from individual task and path variationsToday with schedule updated for future

24 Traditional (PERT/CPM)Managing the schedulePanic sets in with the first late taskFocus switches from the global perspective of the original project goals to a more local perspective of task completionAt the task level, the focus switches from content, dependencies, and durations to start and end datesWe hold resources to the original schedule dates in place of the necessary conditions that define what is needed to start a task and the deliverables that define when a task is finishedDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

25 Traditional Project controlNo reliable mechanisms to determine when a project is in trouble or to determine which activities can afford to wait awhile - No Visibility of the Impact of Decisions or Variability!Importance is placed on achieving task or milestone conformance to scheduled start and completion dates rather than deliverables in an effort to insure or improve project on time performance.When faced with conflicting task priorities and no clear way to determine how much safety remains in each task, resources and Resource Managers multi-task to try to minimize the harm to either task.

26 How does this fit with our fundamental needs of the system?Improve flow (order to cash in hand cycle time) as the primary objectiveBe translatable into practical mechanisms that guide the operation when not to produceEnable the need to abolish local efficienciesInclude a focusing process to balance flowDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

27 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COContemporaryCritical ChainDeveloped in the early 1990’sUtilized the Thought Process tools of the Theory of Constraints to analyze the situation and test the solutionStarted from scratch taking into account current realities of limited resources, money and time.Focused not only on the mechanical/software aspects of organizing the project but also looked heavily at the psychological and human behavioral issues of projectsThis includes the negative behaviors of years of experience and;The desired behaviorsUsed aspects of traditional approaches where applicableDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

28 TOC’s View of Project ManagementImproving flow:Minimize bad multi-tasking both within and between projectsMulti-project environment – Freeze about 25% of the projects to switch focus to finishing work rather than startingIndividual projectsPlan project from a necessity point of view – starting with desired outcome and working to beginning (Handoff)Separate safety from task time to get an aggressive but possible time to create a sense of urgencyDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

29 TOC’s View of Project ManagementWhen not to work:Aggregate ½ of the freed safety to create buffersBuffers correctly set tasks to the as late as possible position while still protecting the project due date form 95% of the uncertaintyRelative status of buffers tells which task a resource should work on when there is more than one open task for that resource – this minimizes bad multi-taskingFull Kit concept delays start of task until all necessary inputs are available to minimize ineffective workaroundsDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

30 TOC’s View of Project ManagementAbolish local efficiencies :Focus is on completing work as fast and accurately as possible and getting it handed offWhat constitutes “done” is clearly defined so that tasks can’t be drawn out to fill available time (Parkinson’s law and 3 minute egg rule)The only dates that are important are necessary milestones and the project completion promise – focus is on content not datesReview progress by asking how long to finish not what percent is completeDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

31 TOC’s View of Project ManagementFocusing process to balance flowBuffer Management:Buffer status (Green, Yellow, Red) directs management as to when, and how, to react to individual disruptions to flowCauses for delays that result in buffer consumption are recorded and analyzed to target common offender disruptions to flow. (Pareto) This can be process/activity focused and/or resource focusedLean, Six-Sigma and other process improvement tools are utilized to systematically and continuously improve flowDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

32 Flow killersThe assumption that the earlier we start a project/task, the earlier it will be finishedHow we estimate durationsbad multi-taskingMissing tasks and/or dependencies in the planning stage

33 Multi-project fast laneTactic – Freeze 25% of open projectsLevel of Management involvementRate of completionSafe ZoneXNumber of open projects or tasks

34 What is estimated task time really composed of?Productive work timeNonproductive timeSafety (insurance against uncertainty)

36 The Sixes Game You work in my organizationYou are rewarded according to your performance versus a standardThe standard is the maximum number of rolls it should take to get a 6Your performance is based on your roll of the diceYou will be measured on the number of rolls it actually takes you to get a 6

37 How we waste safetyParkinson’s law - Work expands to fill the time available (poor definition of DONE)Three minute egg rule - There is an implication of poor quality if done too soon as well as changed expectations regarding future estimatesStudent syndrome – Argue for extension of time estimate for all kinds of reasons then, Why do today what you can put off to tomorrowMulti-tasking - Increases lead time for any individual activity as there is unplanned time spent starting and stopping

38 Understanding the problem furtherTask completion timesThe time to complete each task consists of:• the time to perform the task,• the time to set up to work on the task (finding everything and remembering where you left off)again and again.• the time to shut down or set down time.• the time the task had to wait for the resource whilethe resource worked on other tasks.

39 Multi-tasking A A A A A A A A B B B B B B B B C C C C C C CHow work was plannedCHow work was performedActual resource time

40 The multi-tasking GameOur job is to complete three tasks:Write a column of numbers from 1-26Write the letters of the alphabet from A to ZDraw a repeating sequence of Square, circle, triangle until you have 26 objectsYou must alternate columns as you complete your task (number, letter, shape)We will time to see how long it takes1A2B3C4D5E6F7G8H

41 Is the buffer time already in the estimate?Have we validated that uncertainty exists and that we need to protect ourselves from it?Have we discovered that everyone protects themselves by adding significant amounts of safety time?Is it true that the more project experience the more safety included?Who has control of the safety? Who should?Have we discovered that a significant amount of the safety that is built in to the tasks is, in the end, wasted?

42 Separating the work from the safetyTraditional – Distributed safety time remains within the tasks and in the control of each resource. Everyone must protect themselves as we know Murphy will strike we just don’t know when and where.Critical Chain - Aggregated safety time is gathered and placed strategically in the control of the project manager but available to the resources when needed. We still don’t know when and where Murphy will strike but we control the insurance.50 % for work25% freed25% for insurance/bufferBufferFreed safety

43 Negotiations TraditionalGive plans and specs and ask for a price and durationTry to get their numbers to match your needs after the factEach variable is now played against the other Lower cost=longer time Less time=reduced scopeThe resource is in control of the negotiationsTOC – Critical ChainConfirm capability to perform scope and deliverablesDetermine prerequisitesGet estimate of duration and first availability (90% skewed time likely)Split time 50:50Check fit to scheduleAsk for cost reminding that others are bidding under same circumstances

44 Critical Chain Task Definition and Building of the Project NetworkTask Definition and Building of the Project Network (begin with the end in mind)Clear identification of deliverables needed to accomplish project goals stated in terms of expected outcomes for, or impacts to, the organizationClear identification of expectations of project plan and management is included in the project goals definitionThe tasks are defined from the end (future) of the project to the beginning (current time)Task definition is complete when all starting tasks have either already begun or their required inputs are already availableDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

45 Defining tasks and relationships simultaneouslyTask that accomplishes the need or overcomes the obstacleNeed or obstacleClearly stated objectives of the project and the project planNeed or obstacleTasks are defined by starting with the project goal(s) and then working earlier in time until currently occurring activities are reached by asking: In order to… I must immediately have completedNeed or obstacleWhen branches occur, one branch is completed before starting another

46 Determining the who, what, and how long?Tasks definition is complete when the starting tasks are either already in process or all inputs needed to begin them are available.The resources needed to perform the tasks can now be brought in to help verify that no tasks or needed inputs or requirements have been missed. This includes adding detail where what is needed is uncertain (outsourced activity).Once the work is defined, the times to complete the work can be determined.

47 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COConverting to the Gantt viewThere is no need to convert WBS scheduled activities to PERT view (precedence diagram) to determine task dependencies (task to task and paths/integrations) as this was done simultaneously with task identificationThis information does still need to be entered into our scheduling softwareThe network view must still be converted to the Gantt view to determine time relationships to allow us to identify the Critical Chain and immunize the schedule from variabilityThe software does this for usDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

48 How a project looks graphicallyNetwork View?Bar Chart (Gantt View)The need and obstacle elements of the network view disappear in the Bar Chart (Gantt View) as they do not contain elements of work or time

49 Mechanisms for immunizing the scheduleTOC - Critical ChainTask, path, and resource dependencies are all considered prior to identifying the “Critical Chain”Resource contentions are resolved from project completion toward startStrategically sized and placed buffers allow decoupling of the overall project from individual task and path variationsBuffer = 1/3 of total path time (task + Buffer)Dr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

50 Identifying the Critical ChainMove all tasks to as late as possible and all dependencies are taken into account (task, path and resource)

52 Identifying the Critical ChainContinue resolving resource contentions from the end of the project to the beginning.(CC)The Critical Chain (CC)is the longest path of continuous dependent events including resource, task and path dependencies.

53 Immunizing the project from variation along the Critical Chain: Sizing and placing the project completion buffer (PCB)(CC)PCBThe project completion buffer (PCB) acts as a variation absorber and is equal to 50% of the total task time along the Critical Chain making it 1/3 of the total project lead time.

54 Sizing and placing the feeding buffers (FB)Immunizing the Critical Chain:Sizing and placing the feeding buffers (FB)*****PCB(CC)*****Identify locations where activities feed into (integrate with) the Critical Chain.The feeding may be due to task dependencies*, path dependencies** or resource dependencies ***

55 Sizing and placing the feeding buffers (FB)Immunizing the Critical Chain:Sizing and placing the feeding buffers (FB)FB**FBPCB(CC)FBFB**The feeding buffers* (FB) act as variation isolators between non Critical Chain activities and the Critical Chain.They are also equal to 50% of the total task time along the chain of tasks they are isolating.This may result in gaps in the Critical Chain and/or the need to start a non-Critical Chain activity before the Critical Chain.

56 Project lead timeFBFBPCB(CC)FBFBThis Feeding Buffer creates a new resource conflict but it is not resolved as all times are estimates so there may or may not be a conflict during actual execution and if so the buffer will address itThe actual project start or end date is relative to time needs of the project: Drop Dead or Open Ended

57 When not to produceThe feeding buffers tell us the right time (not too early or late) to start non-critical tasksProject lead timeFBFBPCB(CC)FBFB

59 What about a multiple project environment?Using a drum, key resource, to stagger projectsPCBFBThe start of the next project would be based on the placement of the last drum task in the current schedule and the first drum task in the next project with a buffer between the last and first respectively

60 If the red resource is the drumPCBFBProject OneDBPCBFBProject TwoDB

61 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COManaging the scheduleTOC - Critical Chain - Buffer ManagementFocus remains on the global perspective of the original project goalsProgress is reported based on buffer status and estimated time for remaining tasksAt the task level, the focus is on getting the job done as soon as possible while maintaining original contentThe buffers allow time to plan and react appropriately to variation in the scheduleDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

62 Buffers are used to provide focus and early warning to protect the critical chain and due dateWATCHOKZone 3ACTZone 1& PLANZone 2BUFFERMANAGEMENTRemainingProject Buffer:100% %67% %33% %

63 Project Control - Buffer ManagementThe mechanism for gathering data provides us a glimpse into the future - so we can take action before we are in trouble while also allowing us time to not be pressured to act when actions are not necessary.The organization gathers the information for the status of the buffers in the following way:Each resource that is working on the project gives a “daily” status of the time they estimate they still need to work until the task is complete. That information is used to calculate whether any buffer time would be gained or lost if these time estimates proved true.This “daily” interaction is key to reinforce new behaviors and to provide opportunities to mentor resources.

65 CCPM Project Control: When and where to work and when and where to interveneDo we have a way to determine how much safety is leftif there is a conflict for the resources?Yes - The Project Buffers!We apply Buffer Management via comparing buffer status as our control mechanism.

67 Process of Ongoing Improvement (POOGI) Evaluating ResourcesBuffer impact (should track +, -, and average)Number of charged or credited times they impact the bufferCharged duration of the impacts(Should be viewed from both absolute and relative perspectives)Causes for charged impactsSame problem over and overDifferent issues from time to timePoor at identifying potential problemsConstantly understaffing projectHigh levels of reworkAbility to consistently reduce the cost and time to do similar work from project to projectDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

68 How does this fit with our fundamental needs of the system?Improve flow (order to cash in hand cycle time) as the primary objectiveBe translatable into practical mechanisms that guide the operation when not to produceEnable the need to abolish local efficienciesInclude a focusing process to balance flowDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

69 Buffer ManagementHere is a project that has a Critical Chain of 85 days, a Project Buffer of 43 days and a total lead time of 128 days.

70 Buffer Management Planned -> actualThe first task completes 5 days early, but the second task takes 25 days to complete. Buffer Management shows the Project Buffer to be in Zone 3. Net schedule variance +10 days. What action should the Project Manager take?Planned -> actual

71 Buffer Management Planned -> actualAfter 20 days of work, the resource assigned to the third task is projecting completion in 20 days. Buffer Management shows the Project Buffer to be in Zone 2. What action should the Project Manager take?Planned -> actual

72 Buffer Management Planned -> actualAfter 30 days of work, the resource assigned to the third task is still projecting completion in 20 days. Buffer Management shows the Project Buffer to be in Zone 1. What action should the Project Manager take?Planned -> actual

73 Buffer ManagementHere is a project has a Critical Chain of 85 days, a Project Buffer of 43 days and a total lead time of 128 days.

74 Buffer Management Planned -> actualThe first task completes 5 days early, but the second task takes 25 days to complete. Buffer Management shows the Project Buffer to be in Zone 3. The first task of the feeding path is accomplished in the duration time. What action should the Project Manager take?Planned -> actual

75 Buffer ManagementAfter 20 days of work, the resource assigned to the third task is projecting completion in 20 days. Buffer Management shows the Project Buffer to be in Zone 2. The second task of the feeding buffer is projecting completion in another 10 days. What action should the Project Manager take?

76 Buffer ManagementAfter 30 days of work, the resource assigned to the third task is still projecting completion in 20 days. Buffer Management shows the Project Buffer to be in Zone 1. What action should the Project Manager take?

77 Organizational Cultural ChangesResulting EffectsSurges or peak demands on resources are minimized or non existentNatural human behaviors are used to create an environment of continuous improvementProjects are consistently delivered on or before committed dates, often under budget, and with all original scope objectives in placeMore projects can be accomplished within the same time and with the same resourcesDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

78 Key tactics of CCPM that could be used without full implementationNecessity approach to Network buildingNegotiation processCritical Chain/path identification from end to beginningTracking progress by asking how long to finishMinimize multi-tasking – can make a conscious effort but will not have buffers to direct and enforceModification of buffer based priority – Each activity you make a commitment to has a due date. The time between making the commitment and the due dale = 100%. You can work whatever task has used the highest % of its assigned bufferDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

79 CCPM as a growth strategyCritical Chain offers a new and refreshing approach and solution for the undesirable effects project managers and organizations can no longer afford to suffer fromCritical Chain is a complete solution that deals with both the algorithms of scheduling and the impacts of, and on, human behaviorIt is a solution that identifies the correct data processing needed to support schedule creation and managementDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO

80 Dr. Russ Johnson, President Improvement Quest, Inc Loveland, COConclusionsCritical Chain offers a new and refreshing approach and solution for the undesirable effects project managers and organizations can no longer afford to suffer fromCritical Chain is a complete solution that deals with both the algorithms of scheduling and the impacts of, and on, human behaviorIt is a solution that identifies the correct data processing needed to support schedule creation and managementDr. Russ Johnson, President Improvement Quest, Inc Loveland, CO